Record first half for LTC facility refinancing.

How low can you go?

In the case of interest rates and their impact on construction or remodeling of long term care facilities as low as the economy will send them. Those in the business of refinancing the long term care industry aren't complaining.

Just ask Jeffrey A Davis, chairman of Chicago-based Cambridge Realty Capital Companies. This company had a record first half in 2003 when it came to refinancing long term care facilities.

Cambridge which specializes in HUD-insured transactions, reported that it closed $140.7 million in transaction through the first six months of 2003, compared to $154.9 million in all of 2002.

A HUD report also notes that Cambridge funded more senior housing/healthcare units than any other HUD lender during the first half of 2003.

The strong activity comes courtesy of interest rates that are at their lowest levels in almost half a century, according to Davis.

Davis said the Current financial cycle has made FHA-insured HUD loans the "funding vehicle of choice" for any many senior healthcare borrowers.

"With rates at record lows, borrowers need to search for any financing on their books with HUD interest rates of 6.5 percent or higher," Davis said. "At this level, properties become excellent refi candidates."

Even loan origination requests have soared in recent months. Although lenders typically close only a small percentage of these requests, it's still a good indicator of where the market is headed, Davis said.

"The refi boom has lifted origination requests to new highs," he said "Most likely, this trend will remain in place even as mortgage rates inch higher in the months ahead."

Those starting from scratch aren't being hindered by low interest rates, either. Typical projects since August include:

* Cloverwood, a 152-unit independent living and assisted living community in Rochester, N.Y., financed for $50.2 million by Retirement Living Services LLC of Hartford, Conn.

* The Huntington, a 124-unit independent living apartment complex in Nashua, N.H., financed for $50.1 million by Retirement Living Services.

* A $1.1 million mezzanine loan made to Marquis Companies Inc., a regional owner and operator of skilled nursing and assisted living facilities in the Pacific Northwest, courtesy of Ziegler Healthcare Capital of Shrewbury, NJ.

* Meridian Village II, a 133-bed assisted liiving, independent living and sheltered care facility in Glen Carbon, III, funded with $15.6 million from St Louis, Mo.-based Gershman Investment Corp.

* Lydia Health Care Center, a 412-based skilled nursing home facility in Robbins, III., funded for $27.2 million from Cambridge.